ConocoPhillips says keen to tap proposed trans-Australia gas pipe

DARWIN, Australia, April 20 (Reuters) - ConocoPhillips
will consider diverting natural gas from fields in
northern Australia along a proposed transcontinental pipeline
that would link directly to markets in the southeast, a senior
executive told Reuters on Thursday.

The U.S. oil major is also leaning towards developing the
Barossa gas field offshore northern Australia, with a final
decision due in the first quarter of 2018, Kayleen Ewin, the
company's vice president for sustainability, communications and
external affairs, said in an interview. That is earlier than the
company had previously indicated.

Ewin said the proposed transcontinental pipe would open
Australia's domestic market for northern producers. The system
would carry natural gas from the Northern Territory to Moomba in
South Australia, the hub for gas to the country's main
southeastern markets. Australia's government said last month it
would study and possibly contribute to building the pipeline.

That offers another opportunity for developing gas resources
in a region where Royal Dutch Shell, Malaysia's
Petronas, Italy's ENI SpA, and Australia's
Santos and Origin Energy have undeveloped
interests.

"Really our only route to market at the moment is LNG
(liquefied natural gas) for northern Australia gas, and we
always welcome anything that opens up another route to market,"
Ewin said.

"We'd definitely look in to it ... southeast Australia for
LNG has historically been and will be in future a big market for
us. Proximity to market just means there is a cost advantage in
terms of competing."

A looming gas shortage for Australia's populous east has
seen prices spike and the government search for solutions,
including calling a crisis meeting this week with producers,
some of whom have drawn gas from the domestic market to meet
export contracts.

Another pipeline linking central Australia with the east is
delayed.

ConocoPhillips announced on Wednesday it is also considering
adding a second production unit, or train, at its Darwin LNG
plant and possibly processing gas from rivals' undeveloped
fields.

ConocoPhilips is also in the final stages of picking a new
gas field to fill the plant's existing train, when supply from
its current gas source, the Bayu-Undan field, runs out around
2022.

"Barossa looks to be the lowest cost development," Ewin
said, adding its proximity and the ease of extraction means the
company is leaning toward preferring it over the larger Poseidon
field.

The project is expected to cost up to A$10 billion ($7.5
billion).

The company had said in February a final decision was due
late in 2018 at the earliest.